Since Revel casino was sold to a Florida real estate developer a few months back, the property has struggled to attain electricity. The protracted energy dispute resulted from a disagreement with ACR Energy Partners over past charges and fees. Under a new agreement, developer Glenn Straub’s Polo North will pay $30 million to ACR and buy the power plant that currently services the boardwalk property. In exchange, ACR will put up $15 million to pay off bondholders.
Following the execution of this deal, Polo North will assume ownership of the utility equipment stored in the power plant located across the street from the former Revel casino, as well as the power plant structure. One piece of equipment, a detachable cogeneration unit, will still be owned by an affiliate of ACR, but it is expected to be removed and repurposed in the coming weeks.
The new agreement follows the official start of foreclosure proceedings against the power plant in October. The Bank of New York Mellon’s foreclosure suit was dismissed when the agreement between Polo North and ACR was put on the record in federal court earlier this week. The parties have until December 2 to sign and execute the purchase agreement.
The U.S. district court judge that was overseeing the case stated that he was “very pleased and very surprised” about the agreement. He went on to state that the purchase “represents
a great step forward for this property and… Atlantic City.”
Ongoing disputes between Revel’s new owner and the utility have made headlines for months. Just days after Polo North officially closed on the property, ACR disconnected service to the former casino. It has remained off since that time other than the restoration of limited service to address fire safety concerns.
When asked about the deal, Straub highlighted the importance of this purchase. The real estate investor stated that there were two major problems at the source of Revel’s bankruptcy, and purchasing the Revel power plant eliminated one of them. The other problem relates to property taxes for the $2.4 billion casino complex.
Following the purchase of the power plant, Revel is one step closer to a potential reopening. Straub said after the hearing that he will entertain casino operators interested in bringing gambling operations back to the former casino if they are willing to agree to a 30-year lease. Straub is hopeful that at least a portion of the property will be open by summer 2016.
The pressure is building for Revel to reopen in the near future. Atlantic City Council president Frank Gilliam recently stated that he will move to name a redeveloper for the area surrounding Revel. If it isn’t reopened by this time, Revel will risk being declared blighted and possibly even being condemned by the city.
For followers of the story of Revel, the power agreement is yet another twist in what has been a truly unique journey. Whether or not the casino is reopened in the short term remains to be seen, but you can bet that there’ll be more drama along the way.